Meeting China’s Global Resource Needs

The report analyzes China's high vulnerability in its palm oil supply chain, which is heavily concentrated in Indonesia and Malaysia. It identifies critical sustainability risks, including deforestation, greenhouse gas emissions, and human rights abuses, and suggests that while these may not immediately disrupt supply, they pose significant reputational risks for Chinese brands and long-term security risks. The document proposes five policy interventions, including capacity building for embassies and alignment with international sustainability standards like the RSPO.

• China is highly vulnerable regarding its palm oil supply security due to extreme import dependence and geographic concentration. In 2011, China's import dependence was 98%, with approximately 96% of imports originating from Malaysia, Indonesia, or India.
• The palm oil industry in Indonesia and Malaysia is linked to severe environmental degradation. Expansion has led to large-scale deforestation of tropical forests and peatlands, resulting in biodiversity loss and significant greenhouse gas emissions, making Indonesia the world's third-largest emitter of greenhouse gases.
• Social and governance risks are prevalent in the supply chain, including land disputes with indigenous communities, forced labor, and corruption. In Indonesia, over 660 land dispute cases are being monitored, and reports indicate the use of child labor and debt bondage among the approximately 3.7 million workers in the sector.
• While palm oil is the second most consumed vegetable oil in China, its economic impact on the overall GDP is relatively small (approximately 0.1% of GDP), but it is critical for the food processing industry and fast-food chains.
• Reputational risk is becoming a primary driver for sustainability adoption among Chinese firms. While there is little evidence that palm oil controversies have yet damaged Chinese brands, increasing interest in the Roundtable on Sustainable Palm Oil (RSPO) suggests growing concern over brand equity.
• The report recommends five specific policy actions for the Chinese government: building capacity in overseas embassies to help companies identify sustainability issues, aligning with international standards, researching financial incentives for sustainable supply chains, implementing green public procurement, and integrating supply chain standards into corporate social responsibility guidelines.

APA

Potts, J., Huppé, G. A., Dion, J., Voora, V., & Forstater, M. (2014). Meeting China’s Global Resource Needs. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/china_global_resource_palm_oil_cn.pdf

Chicago

Potts, Jason, Gabriel A. Huppé, Jason Dion, Vivek Voora, and Maya Forstater. Meeting China’s Global Resource Needs. International Institute for Sustainable Development, 2014. https://www.iisd.org/system/files/publications/china_global_resource_palm_oil_cn.pdf.

Wikipedia

{{cite report |last1=Potts |first1=Jason |last2=Huppé |first2=Gabriel A. |last3=Dion |first3=Jason |last4=Voora |first4=Vivek |last5=Forstater |first5=Maya |title=Meeting China’s Global Resource Needs |publisher=International Institute for Sustainable Development |date=February 2014 |url=https://www.iisd.org/system/files/publications/china_global_resource_palm_oil_cn.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{potts2014meeting, author = {Potts, Jason and Huppé, Gabriel A. and Dion, Jason and Voora, Vivek and Forstater, Maya}, title = {{Meeting China’s Global Resource Needs}}, institution = {International Institute for Sustainable Development}, year = {2014}, month = feb, url = {https://www.iisd.org/system/files/publications/china_global_resource_palm_oil_cn.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }